Ft. Wayne's air trade alliance

April 8, 2002

Ft. Wayne's air trade alliance

Indiana airport overcomes setbacks and repositions itself in the process

By John F. Infanger, Editorial Director

April 2002

Skip Miller, A.A.E., executive director of airports

WAYNE, IN - C.T. 'Skip' Miller is bullish about the growth opportunities of this city in Northeast Indiana. As the community's airport director, he could justifiably be skeptical, having had one major cargo carrier depart and the current one in bankruptcy protection. Yet, Miller's optimism reflects that of Ft. Wayne, where old industry has left and new come along. Today, an economic development initiative has the airport and local agencies working in concert to create an Air Trade Center, with the necessary infrastructure now firmly in place.

Ft. Wayne is already a transportation hub without considering the airport, serving as a vibrant trucking center on the crossroads of Interstate 69 and U.S. Highway 30. Historically, it served as a center of movement, situated at the meeting point of the Maumee, St. Mary's, and St. Joseph rivers. It also witnessed the launching of such products as the washing machine, baking powder, the hand-held calculator, juke boxes, refrigerators, parking meters, and the National Basketball Association.

Since 1994, Ft. Wayne International has completely reconstructed its terminal facility, originally built in 1952. In seven years, the airport has seen jet service grow from 16 percent of commercial activity to some 73 percent today, according to director Skip Miller, primarily due to the influx of regional jets.

The airfield was constructed in 1941 by the U.S. military in just three months, opening on December 6. After the war, the city of Ft. Wayne took over the field and named it Paul Baer Municipal Air-port, after a World War I aviator.

In 1985, the Ft. Wayne-Allen County Airport Authority took over control of the airport, which was renamed Ft. Wayne International in 1991.

The creation of the independent authority, says Miller, served as the catalyst for reconstructing what had become a tired airport, and led to a new focus on the airport as an economic development tool. From that point, the two objectives - airport revitalization and growth - began to come together.

The Burlington Experience
The first cog in the new economic development wheel was the addition of Burlington Air Express (today BAX Global), a ground-based carrier which simultaneously launched air service with the base at Ft. Wayne. While that led to the beginning of significant infrastructure investment, most notably a 12,000-ft., Category 2 ILS runway system, it was a deal that Miller says was destined to fail from the outset, and several years later Burlington pulled out and relocated to Toledo (OH) Express Airport.

"It was a classic example of a business deal put together by people who didn't understand the relationship of an airport to its airport operators and tenants," comments Miller. "The people who were actually running the airport didn't negotiate the agreement with Burlington; that was left to the economic development people with the city. And Burlington had never operated an airline before and they didn't understand the classic airport-tenant relationships, either. Conse-quently, a deal was formed that no one could live with."

Cargo carrier Kitty Hawk, currently in bankruptcy reorganization, occupies 76 acres of Ft. Wayne's 450-acre Air Trade Center property. The airfield serves as the hub for Kitty Hawk, which is based in Dallas.

Despite the setback, explains Miller, the deal eventually brought much of the overall goal to fruition. The infrastructure plans intended to keep Burlington were eventually completed and in time lured Dallas-based Kitty Hawk, Inc., which operates its domestic cargo hub here, serving some 40 cities from Ft. Wayne.

"In the end the community benefited with the runway, the Cat 2 ILS, and we now have 450 acres that has become the international Air Trade Center that was purchased for Burlington to relocate to for its permanent facility. They couldn't take those things with them. So, consequently, we were left with some tangible assets that we're putting to work for us today in this community."

Kitty Hawk, meanwhile, has seen its fortunes take a downturn, but Miller remains optimistic that the current reorganization plan filed in February with the U.S. Bankruptcy Court will keep the carrier operating long term at Ft. Wayne.

Meanwhile, the development initiative has continued to evolve while the authority has continued to invest in the airport. Since its creation, the authority has attracted some $100 million in Airport Improvement Pro-gram dollars from FAA, says Miller, which has led to a total upgrade of the airfield. The terminal was gutted and rebuilt with the help of a $3 passenger facility charge. A new air traffic control tower is planned for 2003, and air carrier service continues to be strong with seven carriers providing service to six hubs.

Coordinating Efforts
"We've worked very hard with the city and the county," explains Miller. "Some of the airport is outside the city limits, so we have to work with both jurisdictional agencies for zoning for compatible development, and for industrial zoning such as the Air Trade Center.

Decision Time for a GA Airport

When does closing an airport make sense? To many, the answer is never. However, in Fort Wayne, IN, officials are grappling with the reality that its general aviation airport, Smith Field, may be beyond being "cost-justifiable."

Skip Miller, executive director of airports for the Ft. Wayne-Allen County Airport Authority, says that a decision is expected soon on whether or not to keep Smith Field active. He points out that there are very valid reasons for closing the airport: the return does not justify the investment; it is too constrained to meet federal funding standards; and, perhaps most important, two nearby general aviation airports have seen considerable investment in recent years and offer users better alternatives.

Says Miller, "One of the linchpins, from a financial standpoint, is that it is not a federally eligible airport; it doesn't meet federal standards. Any revenue has to come from the international airport's revenues or another local pot.

"The FAA said, we'll fund an airspace determination study to see what would make it eligible for federal funding, and it essentially says that the crosswind runway [2,900 ft.] would need to be closed and the main 3,100-ft. runway would need to be decreased to 2,160 feet. That's not a lot of pavement, and it exacerbates the problem because then the question is, can it attract a viable fixed base operator? It really doesn't meet the commercial viability test now."

According to Miller, a study conducted 12 years ago determined that Smith was not cost-justifiable and recommended six sites for a new GA airport. The airport board subsequently passed a resolution that said it would not build a new airport, and would allow Smith Field to operate for ten more years at which time a determination would be made as to its long-term fate. The ten-year period ends in 2002, which coincides with the end of the lease term for the FBO, Cruise Aviation, which also operates at Ft. Wayne International and nearby DeKalb County Airport.

"The expiration of the FBO lease is a driving force to get a decision on what to do," says Miller.

Another critical determining factor, he says, is that some $8 million has been invested in improving neighboring DeKalb County and Huntington airports, offering GA users more viable alternate airfields. "They haven't remained stagnant," he says.

"They understand that the airport is every bit as important to the community as the interstate highway system. And they understand that it's not just a transportation facility but it's a major economic development facility. Between Kitty Hawk, the Air Guard, and all the other tenants, we are one of the largest employment centers in the region and we have an economic impact in excess of $373 million."

Regarding economic development, the airport authority early on decided to tie in the future of the airport with industrial development, leading to the creation of the Air Trade Center. At the same time, a joint venture was undertaken with the Ft. Wayne Chamber of Commerce. According to Miller, the objectives were three-fold:

o promote the Air Trade Center;
o develop the airport for other non-aeronautical purposes as property became available; and
o air service development and enhancement, which was a primary target of the business leaders.

A marketing team was hired, based at the airport, and paid for by the authority, although they were considered employees of the Chamber. "So, we have this coupling of the business community with the airport," explains Miller. "We have buy-in of the business community."

More recently, the initiative has evolved further to incorporate the Ft. Wayne/Allen County Economic Development Alliance. Says Miller, "With the advent of the new agency, we're going to be moving two components of our marketing team to the economic development alliance - the aeronautical development for the Air Trade Center and the non-aeronautical development. The air service development and enhancement elements of our marketing will remain with the Chamber of Commerce, because that's really the biggest focal point of the business community."

The primary targets for the Air Trade Center remain air freight, aircraft maintenance, aircraft manufacturing, and sub-component manufacturing, says Miller. Secondary targets include related industries such as trucking, perishable goods facilities, and other support companies.

Full-time customs is in place and the Air Trade Center lies within a foreign trade zone. The state offers permanent tax abatement incentives to attract new business. Ongoing marketing will continue to include cargo trade shows, and Miller says a new "bottom up" localized marketing program will first track cargo moving through Ft. Wayne and then be directed at receivers at the other end, who will then be pitched on the benefits of being based here.